Genex Power has announced the Northern Australia Infrastructure Facility (NAIF) Board has expressed its support for the development of the financing structure for the Kidston Stage 2 project through the provision of an indicative term sheet for a long-term concessional NAIF debt facility for up to $516 million.
The NAIF Term Sheet provides for a secured, long tenor subordinated loan of up to $516 million to the Project, and is subject to a number of conditions and customary terms for a project financing term sheet, including the following:
- negotiating offtake arrangements and grid connection for energy and dispatch rights for the Project to the satisfaction of NAIF;
- concluding a cost benefit analysis in accordance with the provisions of the NAIF Investment Mandate1, which will be important in determining the level of concessionality that NAIF can offer the Project;
- finalising terms for senior debt funding;
- securing the balance of equity funding from an acceptable equity partner;
- due diligence on a range of Project matters;
- negotiation and execution of project and facility documentation; and
- final NAIF credit approval and Board Investment Decision.
Genex CEO James Harding said: “Genex is very pleased to work with NAIF in the development of the Kidston Stage 2 Project. The issuance of the Term Sheet and NAIF’s support to negotiate the detailed terms of a long tenor, concessional loan which would secure the bulk of the Project debt funding, is a significant milestone in the development of the Project.
“NAIF’s indication of this support will assist Genex to advance its discussions with other Project counterparties and to prove up the Project fundamentals. This is a demonstration of how NAIF can work with stakeholders to help them understand how its concessional financing can support the development of a project which has the potential to provide substantial benefits to Northern Australia,” said NAIF CEO Laurie Walker.
“NAIF sees the Project as important for the transition of the market to lower emission renewable energy sources, and the Board’s preparedness to consider a capital commitment of the size referred to in this announcement reflects the alignment of this type of project with NAIF’s objective to contribute to the transformation of Northern Australia through infrastructure development.”